WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flights every day (excluding certain holidays) for a total of 1,400 fights per year 350 days x 4 flights per day). WSM has hired a consultant to determine activity-based costs for this operation. The consultant's report shows the following Unit Cost Activity Measure Activity (cost per unit of activity) (cost driver) 1,400 per flight Flying and maintaining aircraft Number of flights Number of passengers 2 per passenger Serving passengers Advertising and marketing Number of promotions 49,000 per promotion wsM estimates the following annual information. With 13 advertising promotions, it will be able to generate demand for 40 passengers per fight at a fare of $195. The lease of the 60-seat aircraft will cost $3,800,000. Other equipment costs will be $1,900,000. Administrative and other marketing costs will be $1,050,000. Required: (a) What annual operating income can wsM expect from this new service? Operating in (b1) considering selling tickets over the Internet to save on commissions and other costs. It is estimated that the cost for flights would decrease by $100 as a result of Internet sales. Administrative and other marketing costs would increase by $2 million. WSM estimates that the added convenience would generate a 5 percent increase in demand. All other costs and fares would remain the same. What annual operating income can wsM expect from adopting Internet ticket sales? erating income